Whilst most apartment buildings will hold building insurance through the body corporate, this insurance will only cover the external elements of the building along with any common areas. Any internal walls within your apartment will not be covered, and your fixtures and fittings will most certainly not be covered.

In the event that your apartment building was damaged or destroyed, without adequate insurance you would be left with a rebuilt shell, but would have to pay for a new kitchen and bathroom, internal walls and painting, new flooring, internal doors, fixtures and fittings and everything else within your apartment. The cost will most certainly be in the tens of thousands, if not hundreds of thousands.

This is not such a concern if you're renting, but you will still need to protect the furniture and other personal items that you have filled your apartment with. Many Australian's underinsure themselves when it comes to contents insurance, factoring in only items such as furniture and electrical goods when calculating their insurance amount. But if you had to replace every single item within your apartment, right down to your hand towels and your socks, you'd be surprised at how close to $100,000 you may go for a small apartment.

Other areas to consider

Insuring your physical apartment and contents is important, but equally important is protecting the income that pays your rent or mortgage, and your day to day living expenses. If you were unable to work due to injury or illness, who would pay the rent or the mortgage repayments? And if you were in such a state, surely being evicted from your apartment would be the worst possible outcome.

Thankfully income protection insurance can assist. For a modest monthly premium, you can protect up to 75% of your income which will be paid to you on a monthly basis in the event that you are unable to work due to injury or illness. Not only can this payment cover your rent or mortgage repayment, but also your general living expenses.

For more information on contents insurance you should contact your insurance broker or insurance company. For more information on income protection we recommend you contact Equita Financial Services.